Durban changes gear with R1bn ICT plan by 2010 and beyond Durban is well on its way to becoming a lot less laid-back. It aims to have its smart city infrastructure complete by year-end and start competing with SA IT hubs DURBAN MAY HAVE a reputation for being a laid-back holiday city, but it already accounts for just over 10% of South Africa`s GDP. Over the past two years, the major port city has grown faster economically than both Johannesburg and Cape Town and is likely to maintain this pace going forward, says eThekwini city manager Dr Mike Sutcliffe.

The fact that its basic municipal tariffs are around 40% of those of Cape Town and Johannesburg may have something to do with it becoming an increasingly attractive business destination.

However, our bet is on Durban`s Smart City strategy being most likely to drive its growth in the next few years, certainly until well after the 2010 Soccer World Cup.

Formalised in its Integrated Development Plan, the strategy looks at how the city can empower employees, citizens, businesses, visitors (including 2010 and beyond) through improving basic telephony (VOIP), Internet access, multimedia (music, video and TV) and other services, be they government-related or not.

"We have already spent over R100 million on the Smart City project, and in the next few years we expect to spend well over R300 million. Our business plan will also leverage private sector funds, and I would think that, in total, it will be over R1 billion to be spent by 2010," notes Sutcliffe.

He explains that the Smart City strategy was conceptualised in late 2002 after he became city manager. He created a unit responsible for all municipal policy as well as ICT and geographic information system (GIS) matters, putting Jacquie Subban in charge of driving that strategy.

The second decision taken was not to appoint SAP as the provider of its ERP system, and instead build its own system, creating its own software (now branded as LogoSoft) and institutional framework (SmartXchange) for driving the Smart City project.

"We then began thinking about connecting the whole city in a way that will give access to all. If we have to connect our own public buildings, why not extend to connect business and community facilities, like schools, and all the residents as well? Particularly given that the poor are quite literate in terms of using mobile phones and the like.

"Why not have a person with a phone device living in a rural area accessing a system which starts by using wireless connections, then connects through the electricity power cables, through the fibre optic cabling and eventually connects to my office?" says Sutcliffe.

The cornerstone projects for turning Durban into a Smart City include the rationalisation of the city`s WAN infrastructure for council purposes, rolling out a host of e-government applications to help the city improve service delivery, providing broadband access through fibre, wireless and power-line cables, implementing information and collaboration portals, and providing citizens with fixed and mobile electronic devices.

Subban explains that the city will also be putting in place programmes with tertiary and other institutions to ensure that "credibly and appropriately-skilled youngsters graduate in the ICT sector".

"We are also creating and will be profiling this city as a centre of learning, both in the IT space and beyond," she says. Durban is part of the United Nations Institute for Training and Research programme called CIFAL (the acronym for International Training Centre for Local Authorities/Actors in French), which aims to promote city peer-to-peer learning. It has also managed to attract Microsoft`s Innovation Centre for Africa to ensure that high-level learning, proof of concepts and other research happens in the city.

NETWORKING THE CITY

"The city has had a WAN for the longest time. The problem was that the WAN was reliant on Telkom infrastructure. We replaced this infrastructure with fibre and also introduced a VOIP system in the council, and have been able to reduce costs significantly. We will extend the WAN further with a wireless component - being rolled out at present and to be completed in the next couple of months - to give access to other council facilities, such as libraries and clinics," explains Subban.

To date, the city has about 90% of all offices and regional centres connected by fibre. The fibre is extensive as the city has facilities throughout the metropolitan area, she continues. It extends south to Kinsborogh, north to Verulum, west to Hillcrest and Waterloo. In the south-west region it covers Chatsworth and Umlazi, and in the north-west it extends through KwaMashu to the outskirts of Ntuzuma.

"For the moment this is sufficient for the rollout of the Smart City project, but it will extend as council requirements demand it. However, as we expand the electricity grid or build new depots or substations, we will extend the fibre network," says Subban.

And, just so you know, the city has received a PTN licence and partner SmartXchange has applied for a VANS licence.

She indicates that it is difficult to estimate the cost of the broadband aspect of the Smart City project, with it having taken the form of a rolling budget. "Historically, the electricity department has installed fibre to carry information about the state of the electricity grid, and the costs associated with this go back many years. Fibre was also rolled out for the installation of CCTV cameras in the city centre. Therefore, it`s difficult to outline the historical and future costs."

However, there are two costs associated exclusively with the project. Firstly, partitioning and securing the fibre so that city information and functioning is not compromised by third-party access to the fibre. The budget for this process and maximising capacity on bandwidth will cost R25 million.

The second cost will result from the last mile connection to individual properties, using the spare capacity of the fibre network. The way the business plan is being constructed takes account of these costs for purposes of redemption. Finally, a small amount of R3 million is being requested from council for the process of operationalising the special purpose vehicle that will deliver on the project. This company should be operational by November.

Subban estimates that by the time this company takes over the project as a business, the council will have spent about R32 million on it since it was launched in January 2005.

Since early last year, the eThekwini Council has been conducting various related pilot projects, including VOIP, broadband over power lines (power line carrier or PLC), portals carrying video over broadband, collaborative tools (such as video calling and Net-meeting), broadband to the Durban International Convention Centre, and end-user devices that can deliver cheaper multimedia access in the home.

All the pilots ran their course by the end of June, with the exception of the PLC pilot, which has been extended. "We want to ensure that power lines are a viable last-mile option in some parts of the city, hence the extension of the project," says Subban.

Speaking about the one pilot site, at a park in Morningside, she explains that data reaches a substation on a fibre-optic cable, which is linked to a network connection, and then to the low-voltage busbars which provide electricity to the homes, businesses and restaurants in the Michell Park suburb. It terminates at a home and, from any 15 Amp plug in that house, the data is converted via a PLC modem to a PC or laptop.

The city wants to provide a minimum of 2Mbps - "certainly for the business community, depending on their need" - and it is also investigating the possibility of this bandwidth for homes, although Subban admits that "still a little more work is required on this aspect".

The plan, although still to be confirmed, is that the broadband offering will be rolled out to large businesses in the first half of the first phase.

"This has to do with financial feasibility and the practicalities of initialising a business," she notes. The second phase is scheduled to roll out to educational institutions and then health facilities, excluding clinics, which will be picked up by the council wireless rollout. The final phase will see rollout domestically.

Subban reports that with most of the infrastructure in (the council is in the final phase of implementing the switches and routers for the infrastructure); the wireless WAN to be complete within months; all pilots but one complete; the project charter, political buy-in and model for the operating company determined, all that is required is completion of the business plan. "The biggest issues facing us now are whether we are going to take on a strategic partner and, if so, what the nature of this partnership will be."

It will finalise its recommendation to the council in this regard by this month. Secondly, the council will need to finalise backend and delivery support. "This is partly dependent on whether it takes a strategic partner, so will only be determined thereafter," she continues. Awarding of contracts on the Smart City project will only begin once the operating company is established.

Subban says that her GIS and Policy department has secured only R3 million for the project for the current year. "We must complete a draft business plan for the project before we can even hope to secure any further funds, especially if that is going to be a sizable sum of money. The goal is to complete the business plan as soon as possible to enable us to take an adjusted budget to council for approval so that the major part of the infrastructure will go in this year."

"The broadband rollout is certainly going to make the city far more attractive. We have already had many businesses, pretty much all the major companies in the ICT sector, talking to us and all are very excited about where we are going," notes Sutcliffe.

2010 AND BEYOND

2010 is obviously going to be a milestone for this project. "Fifa has huge expectations of the ICT infrastructure it requires. By 2010 we definitely want to have made major strides in penetrating the domestic market.

This will not only be achieved by the operating company, but also by current service providers that have large customer bases," says Subban.

She adds that by then, the council will also have a number of portals operational by then, for e-learning, e-business, etc. Again, the portals may not be run by the company directly, but will be facilitated by it.

Sutcliffe points out that the Smart City strategy extends to beyond 2010. For example, he and Transnet CEO Maria Ramos have established a high-level Transnet-eThekwini team that is working through 15 work streams from the port, to logistics, to rail/road ratios and so forth. "An integral part of this will be to ensure the ICT infrastructure is at the heart of these initiatives," he says.

He emphasises that a smart city is not built in a day, but that a long-term approach is required. "Forty, 50 or even 60 years should be the big picture. We do little thinking about the world beyond us. One day the world`s oil reserves will be depleted. What does this mean for Durban?

"Our aim is to build our ICTs to connect all our citizens electronically and develop new solutions not only for local government, but for the health, education and private sectors, too. We are not going to start with only the most profitable areas and then think later about expanding into non-profitable areas. If the poor can`t connect, at least at their local schools, then what`s the point of such a system? Cities are not about making profits, but ensuring that the public good is prioritised," maintains Sutcliffe. -

DIAL DURBAN FOR SERVICE

As part of its plan to position Durban as Africa`s technology hub, the eThekwini Municipality is also planning a R240-million technology park adjacent to the Durban Exhibition Centre in the CBD. The high-tech park is to be built in four phases, each costing between R50 million and R60 million, with phase one consisting of 20 000 m2 of space.

The idea is to get the private sector to build the park on the city-owned land, and a request for proposals to develop the park is imminent. Providing high-speed interconnectivity for data, images and voice communication, the park would be developed for businesses in software development and research, communication, multimedia, and for business process outsourcing (BPO), which would include call centres.

"Over the past two years we`ve put our stamp on the national BPO sector. While a few years ago there was only talk of Johannesburg and Cape Town, now we are an important player," says Sutcliffe.

In November last year, Brightview, a UK Internet service provider with 250 000 customers, moved its call centre from India to Durban in a 2-million deal with SA contact centre Bizworks. David Laurie, CEO of Brightview, said the main reason for the move was high turnover levels among call centre agents in India. SA has a turnover rate of 5 to 15% a year, the second lowest in the world, while India`s rate stands at 35%. He also noted that the cost of setting up the call centre in Durban was 60% cheaper than in the UK in terms of rental, staff and other operating costs. "We have recently had some key clients choosing Durban, and over a thousand seats have been brought to Durban recently, largely thanks to the combined efforts of KZNOnSource, SmartXchange and a host of private sector agencies," says Sutcliffe. KZNOnSource is a local government initiative that promotes the province as a call-centre destination, while SmartXchange not only promotes Durban as an investment destination for ICT companies, but also acts as a young business incubation centre. Its virtual incubator programme currently accommodates about 25 SMMEs.

Martin Cele, CEO of SmartXchange, indicates that, in addition to encouraging SMEs to grow in the telecoms, multimedia and software development spheres, it will soon be launching a centre of excellence for skills development in the call-centre and BPO sector, together with KZNOnSource.